Figure 9-2

Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.With the tariff in place, the United States consumes
A)9 million pounds of rice.
B)15 million pounds of rice.
C)31 million pounds of rice.
D)42 million pounds of rice.

Question

Figure 9-2
  
Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.With the tariff in place, the United States consumes
A)9 million pounds of rice. 
B)15 million pounds of rice. 
C)31 million pounds of rice. 
D)42 million pounds of rice.

Quizplus · Accepted Answer

With the tariff in place, the United States moves from point A to point C on the demand curve, consuming 31 million pounds of rice. The tariff raises the price of imported rice by $0.40 per pound, making domestically produced rice relatively more competitive. As a result, domestic rice consumption increases, while imports decrease.

Figure 9-2 Suppose the U.S. Government Imposes a $0.40 Per Pound Tariff